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Acquisition Directorate Saves Billions for Taxpayers, Official Says

WASHINGTON, Oct. 31, 2008  The Defense Department’s acquisition directorate saved billions of dollars for taxpayers after adjusting the purchase schedule of several procurement programs, a senior Defense Department official said here yesterday.

John J. Young Jr., the undersecretary of defense for acquisition, technology and logistics, told reporters that he’d set a goal to save the department $10-$15 billion in procurement costs. Young was appointed to his post in November 2007.

“That’s a pretty high goal … but, I can tell you we think we’ve saved about $5 billion” so far, said Young.

One method found to reduce costs in the acquisition realm involves how the Pentagon purchases its equipment, Young said.

“We looked at a lot of our larger (procurement) programs and found many candidates, where if the enterprise was willing to take the pain of buying a few more sooner, and in some cases buying out faster, or… buying at a more economic order quantity – we can save money,” Young said.

Nearly a dozen Pentagon procurement programs in the fiscal 2009 defense budget will be adjusted in that way to save costs, Young said.

The department also is looking at ways to realize another $30 billion in potential procurement cost savings, Young said.

The Pentagon’s use of joint-analysis teams that examine the merit and capabilities of items such as advanced radar systems and other future equipment, Young said, greatly assists the department in its quest to procure the best military equipment and systems at the best price.

Young said he is thankful for the expertise of in-house military and defense civilian procurement experts who serve on the joint-analysis teams. He also saluted outside procurement experts who serve on defense support teams that brainstorm with Defense Department officials to solve procurement issues.

Using in-house and external experts to evaluate proposed procurement programs, Young said, is an example of “another best-practice that helps the enterprise to get the job done with discipline and efficiency.”

Young also praised the utility of competitions sponsored by the Defense Advanced Research Projects Agency that invite private industry to demonstrate expertise in fields such as lightweight, wearable power systems for soldiers and robotic vehicles.

Thanks to such competitions, the battery weight for prototype soldier-carried power systems, such as battery packs for computers, has been greatly reduced, Young said.

“So, that’s great news in and of itself,” Young said. “We have essentially prototype systems that weigh a third of what we ask soldiers to carry now and offer all the logistical benefits that come with that – less weight, less logistical demand to resupply batteries, et cetera. And, hopefully, we’ll move that technology forward.”

Young said he has sought to manage the Pentagon’s acquisition process based on principles of realistic requirements, mature technology and fiscal discipline.

Future leadership decisions will need to be made on major defense acquisition programs that include new Navy surface vessels, the Joint Strike Fighter, the Air Force’s F-22 fighter, the Army’s Future Combat System and others, Young said.

“I think every one of the big programs will get some level of attention,” Young said, since “the next administration will want to look at how their priorities in the budget line up.”

Returning to the issue of procurement costs, Young noted that Defense Secretary Robert M. Gates has expressed concern about processes that drive up the cost of new acquisition programs and expend additional taxpayer dollars.

Adding requirements beyond a system’s initial design and performance specifications drives up procurement costs, Young said. It’s therefore incumbent upon procurement officials, he said, to decide on the minimum necessary requirements for new defense systems and to carefully weigh the need and cost of adding other desired functions.

“I think bells and whistles are costing us money. Bells and whistles drive more testing,” Young said. “There can be a set of ‘tradable requirements, but we need to be careful about how we’re going to evaluate them.”